AML & Counter Terrorist Financing Policy

Version 1.0 July 2023

  1. Scope
  2. Purpose and Objectives
  3. Policy statement
  4. Definitions
  5. Money Laundering Offences
  6. Compliance
  7. Responsibilities
  8. Equality, diversity and inclusion
  9. Legislation and regulation
  10. Review

1 - Scope

1.1 This policy applies to all Group members and their employees and Board and Committee members (executive and non-executive). All these individuals must familiarise themselves and comply with this policy. Failure to do so will result in disciplinary action where appropriate because of the risks associated with non-compliance. It may also result in criminal sanctions for those involved.

2 - Purpose and Objectives

2.1 This Anti-Money Laundering (AML) policy sets out the measures taken by the Sovereign Network Group (the Group) to prevent, detect and report money laundering and terrorist financing activities in compliance with UK AML laws and regulations, including the Proceeds of Crime Act 2002 (POCA), the Terrorism Act 2000, and the Money Laundering Regulations 2017.

3 - Policy statement

3.1 The Group is committed to conducting its business in an honest, transparent and lawful manner, and to preventing the abuse of its services for money laundering or terrorist financing purposes.

3.2 The Group will take all reasonable steps to ensure that its operations do not facilitate money laundering or terrorist financing and that it complies with all applicable AML laws, regulations and best practices.

4 - Definitions

AML - Anti-Money Laundering

POCA -  Proceeds of Crime Act 2002

MLR - Money Laundering and Terrorist Financing (Amendment) Regulations 2019

HMRC - His Majesty’s Revenue and Customs

FCA - Financial Conduct Authority

MLRO - Money Laundering Reporting Officer

SARs - Suspicious Activity Reports

NCA - National Crime Agency

MLCO - Money Laundering Compliance Officer

CDD - Customer Due Diligence

EDD - Enhanced Due Diligence

PEPs - Politically Exposed Persons

GDPR - UK Data Protection Act 2018 and the General Data Protection Regulation

5 - Money Laundering Offences

5.1 The principal money laundering offences are contained in sections 327, 328 and 329 of POCA. You commit a money laundering offence if you:

  • conceal, disguise, convert, transfer or remove property which you know, or suspect represents the proceeds of crime;
  • enter into, or become concerned in, an arrangement which you know or suspect will facilitate another person to acquire, retain, use or control criminal property and if you know or suspect that the property is criminal property; or
  • acquire, use or have possession of property which you know, or suspect represents the proceeds of crime.
  • These offences are punishable by a fine or imprisonment.

5.2 In addition, sections 330 and 331 of POCA create an obligation to report your suspicion or knowledge of another person’s money laundering to the NCA. Failure to report is a criminal offence.

5.3 It is also an offence to be involved in an arrangement to conceal, remove from the jurisdiction or transfer to nominees, or any other retention or control of terrorist property pursuant to section 18 of the Terrorism Act 2000.

5.4 The Group recognises its obligations to:

  • disclose suspicion of money laundering;
  • have appropriate systems in place to record and report it; and
  • train staff to recognise it.

5.5 The MLRs establish that for businesses operating within the ‘regulated sector’ the offences of failing to disclose suspicions of money laundering and tipping off apply. It sets out responsibilities for having appropriate systems in place for reporting of money laundering, staff training and identifying and keeping records. The Group currently operates within the ‘regulated sector.’

Risk Assessment

5.6 The Group will conduct a risk assessment at least annually (and whenever there is a change to the business or its customers which could alter the AML risk) to identify, assess, and mitigate the money laundering and terrorist financing risks associated with its operations, including risks related to customers, products, services, and geographic locations. The template for risk assessments is at Annex A (available internally only).

5.7 The MLRO will be responsible for coordinating the risk assessment process and for ensuring that the assessment is documented in writing, approved by the Group Board following scrutiny by the Audit and Risk Committee and shared with all employees and Board and Committee members.

Our Controls

5.8 The Group is committed to demonstrating integrity, probity and accountability in our business activities to prevent money laundering. The Group maintains the following controls:

  • assessing the risk of the business being used by criminals to launder money;
  • checking the identity of customers;
  • maintaining client identification procedures and an understanding of the source of funds received making sure the necessary management control systems are in place;
  • maintaining records of all documents that relate to financial transactions, the identity of customers, risk assessment and management procedures and processes; and
  • making sure that employees and Board and Committee members are aware of their responsibilities and have had the necessary training.

5.9 Additionally, the Group has and will maintain the following internal controls to help identify and swiftly report any concerns of money laundering:

  • appointing a MLRO with a clear role and responsibilities;
  • providing all staff with clear procedures for CDD;
  • providing all employees, Board and Committee members with clear procedures for reporting a money laundering suspicion;
  • 5.9.4 maintaining clear record keeping arrangements; and
  • delivering training to relevant staff to raise awareness about individual responsibilities to prevent money laundering.

Customer Due Diligence (CDD)

5.10 CDD

  • The Group will perform appropriate CDD on relevant customers, including verifying their identity and understanding the nature and purpose of their business relationship with the organisation. CDD will be undertaken in all the following cases (irrespective of the fact that some are not covered by the MLRs):
    • shared ownership sales;
    • Right to Buy;
    • lease extensions; and
    • consumer credit activities.
  • CDD will be carried out by employees in accordance with the procedures set out in Annex B.

5.11 Simple CDD

  • Simple CDD measures may be applied in relation to a particular customer relationship or transaction if the customer and transaction is determined as presenting a low degree of risk of money laundering and terrorist financing having considered the risk assessment carried out and any relevant information made available.
  • In deciding to apply simple CDD employees should recognise that the presence of one or more risk factors may not always indicate that there is a low risk of money laundering and terrorist financing in a particular situation. Simple CDD must not continue to be applied if
    • a) the truth or accuracy of any documents or information previously obtained for identifying a customer are doubted, or
    • b) the risk assessment changes and there is no longer considered to be a low degree of risk of money laundering and terrorist financing or
    • c) money laundering or terrorist financing is suspected.

5.12 Enhanced Due Diligence (EDD)

  • EDD will be performed on customers who present a higher risk of money laundering or terrorist financing, such as Politically Exposed Persons (PEPs) (and their family members and close associates) and customers from high-risk jurisdictions. Any decision to transact further to completion of EDD must be approved in writing by the MLRO, and the decision with reasons for transacting will be recorded on the transaction file and centrally.
  • EDD procedures to be used by all staff required to undertake EDD are detailed at Annex C (available internally only).

5.13 Reliance

  • There may be occasions where the Group looks to rely on CDD carried out by third parties involved in a transaction (such as a Solicitor or an Independent Financial Advisor). Any decision to rely on third party CDD must be approved in writing by the MLRO and the decision will be recorded on the transaction file and centrally.

5.14 No reliance can be placed on a third party established in a High Risk Third Country.

High Risk Countries

5.15 A list of high risk countries is available online in order to assist staff in determining risk at:

https://www.gov.uk/government/publications/money-laundering-advisory-notice-high-risk-third-countries--2 Opens in new window

5.16 Whilst EDD measures and enhanced ongoing monitoring are required to be undertaken for any countries on the High Risk Third Countries List, there are other geographical areas which pose a high risk, such as Russia and Venezuela, which must also be considered more generally when assessing whether there is a high risk of money laundering or terrorist financing in a particular situation and when considering the extent of measures which should be taken to manage and mitigate that risk.

Sanctions and Embargoes

5.17 The Group will comply with all applicable sanctions and embargo laws and regulations, including those imposed by the UK government, the European Union, and the United Nations. A list of sanctioned countries is available at: https://www.gov.uk/government/publications/the-uk-sanctions-list Opens in new window

5.18 The MLRO is responsible for ensuring that appropriate screening procedures are in place to identify and manage any relationships with individuals or entities subject to sanctions.

Monitoring and Reporting Suspicious Activity (SAR)

5.19 The Group will continuously monitor its business relationships for signs of money laundering or terrorist financing, including reviewing transactions for unusual patterns or inconsistencies.

5.20 Any employee who identifies suspicious activity must report it to the MLRO. The report should be by email and be clear that it relates to suspected money laundering and should include the following details:

  • Name of the person making the report
  • Name(s) and address(es) of the person(s) involved in the suspicious activity
  • Details of the suspicious activity, including the nature, timing and value of the actual or attempted transactions
  • Any investigations or enquiries that have been made before reporting the suspicions

5.21 The MLRO will evaluate the information and submit a SAR to the NCA, if necessary.

5.22 All disclosures should be made promptly (i.e. as soon as they are suspected) in order for appropriate action to be taken and avoid the individual putting themselves at risk of prosecution.

5.23 Staff must treat information obtained as part of the CDD processes and any concerns regarding suspected money laundering or terrorist financing confidentially, even within the Group.

5.24 Staff must ensure that they do not tip off any third party if a SAR is made, either internally to the MLRO or externally to the NCA. Advice about tipping off must be sought from the MLRO.

5.25 If you have any concerns about possible breaches of confidentiality after a SAR has been made, you must contact the MLRO immediately.

Screening of Employees

5.26 All Group employees will be screened pre-employment. Screening for all employees will involve reviewing the person’s qualifications and checking a person’s referees covering a period of three years.

5.27 Additionally, all employees undertaking regulated activities (including those set out in paragraph 9.1 above) and members of the executive team will undertake Disclosure and Barring Service Checks pre-employment.

Training and Awareness

5.28 All employees and Board and Committee members of the Group will receive AML training at least every two years to ensure that they understand their responsibilities under this policy and are able to identify and report suspicious activity. The following AML training shall be provided:

  • AML familiarisation training delivered by assessed online training modules (all staff)
  • Managers and staff involved in transactions:
  • As above, plus detailed AML training focussing on the CDD process, red flag recognition and escalation.
  • Group Board and Committee members
  • AML familiarisation training plus legislation and strategic update to completement the annual AML risk assessment process.

5.29 New joiners shall receive AML training appropriate for their role within four weeks of joining the Group.

5.30 The MLRO is responsible for coordinating the delivery of AML training and for maintaining records of training attendance and content.

6 - Compliance

6.1 The Group will conduct regular internal audits and reviews of its AML policies, procedures, and controls to ensure their effectiveness and compliance with applicable laws and regulations.

6.2 The MLRO is responsible for coordinating the monitoring and audit process.

6.3 When new products, new business practices (including new delivery mechanisms) or new technology are adopted, all employees must ensure that appropriate measures are taken in preparation for, and during, the adoption of such products, practices or technology to assess .If necessary, employees must take steps to mitigate any money laundering or terrorist financing risks this new product, practice or technology may cause.

6.4 Failure to comply with this policy will result in disciplinary action being taken and will be considered at staff appraisals.

6.5 Breaches of this policy may also require disclosure to the Regulator for Social Housing. As a result of a breach, a report may have to be made to the NCA or other law enforcement agencies, which may result in a criminal investigation.

7 - Responsibilities

7.1 The Group Board is responsible for setting the overall AML strategy and ensuring that adequate resources are allocated to AML compliance.

Money Laundering Reporting Officer (MLRO) - The MLRO is responsible for overseeing the day-to-day
implementation of this policy, providing guidance to employees, and reporting any suspicious activity to the appropriate authorities. The MLRO is solely responsible for the decision to make suspicious activity reports (SARs) to the National Crime Agency (NCA) and is the only person authorised by the Group to make SARs to the NCA, subject to any delegation to the Deputy MLRO for holidays/absence cover. The Chief Financial Officer is the MLRO and the Deputy MLRO is the Company Secretary.


Money Laundering Compliance Officer (MLCO) - The MLCO is responsible for the oversight of compliance with
the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The Chief Financial Officer is the MLCO.


Employees, inc. Board and Committee Members - All employees and Board and Committee members are responsible for complying with this policy and for reporting any suspicions of money laundering or terrorist financing to the MLRO. In particular they must:

  • be aware of their AML obligations and ensure they do not engage in money laundering or facilitate terrorist financing;
  • comply with this policy and related procedures;
  • seek guidance from the MLRO/MLCO on CDD issues;
  • seek guidance from the MLRO/MLCO if they have concerns about a client or a retainer;
  • undertake CDD on a timely basis in strict accordance with the procedures set out at Annex B (available internally only);
  • be vigilant for warning signs of money laundering and terrorist financing;
  • report any warning signs regarding customers or specific transactions in accordance with the procedures of making SARs;
  • refer any queries or request for information from law enforcement to the MLRO;
  • Follow direction by the MLRO or Deputy MLRO;
  • maintain confidentiality;
  • avoid discussing any potential or actual reports with customers or third parties unless authorised to do so by the MLRO; and
  • attend all training as required by the MLCO.

8 - Equality, diversity and inclusion

8.1 We will apply this policy consistently and fairly and will not discriminate against anyone based on any relevant characteristics, including those set out in the Equality Act 2010.

8.2 All matters considered under this policy will be investigated regardless of the individual’s position in the Group, a failure to notify any actual or suspected fraud activity may also be treated as a disciplinary matter.

9 - Legislation and regulation

9.1 The legislation listed in this policy is not intended to cover all legislation applicable to this policy. To comply with clause 1.1 of the Regulator of Social Housing’s Governance and Financial Viability Standard, which requires adherence to all relevant law, SNG will take reasonable measures to ensure compliance with all applicable legislation by reviewing policies and procedures and amending them as appropriate. Any queries relating to the applicable legislation should be directed to the policy owner.”

9.2 The UK AML regime is primarily governed by the following legislation which apply to the Group and therefore to all of its employees and board members:

  • Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (MLRs);
  • POCA;
  • Terrorism Act 2000 (as amended); and
  • all UK asset freezing and sanctions regulations.

9.3 The Group is registered with and regulated by both His Majesty’s Revenue and Customs (HMRC) and the Financial Conduct Authority (FCA) in respect of its AML obligations and will comply with all registration requirements in that regard

10 - Review

10.1 This document will be reviewed every 3 years, or sooner if significant changes occur in the relevant legal or operational landscape.

10.2 The review of this policy will be based on applicable legislation and regulatory requirements and a consideration of sector best practice.

Appendices (available internally only):

  • Appendix A - AML Firm Risk Assessment
  • Appendix B - AML Customer Due Diligence Checklist
  • Appendix C – AML Enhanced Due Diligence Checklist